Umm...Yeah...Citigroup to Cut Up to 50, 000 Jobs: CNBC

Discussion in 'Stocks' started by ByLoSellHi, Nov 17, 2008.

  1. Well, let's just say that's a fairly clear and unequivocal sign of the desperate straights C finds itself in.

    I wouldn't touch this POS at any price.

    Citigroup to Cut Up to 50, 000 Jobs: CNBC

    Published: November 17, 2008

    Filed at 8:30 a.m. ET

    NEW YORK (Reuters) -
    Citigroup Inc plans to cut up to 50,000 jobs, CNBC television said on Monday, as souring economies and global credit conditions cause the U.S. bank with the farthest reach worldwide to retrench.

    The cuts are on top of the roughly 23,000 jobs Citigroup has already slashed this year, and would leave the second-largest U.S. bank with about 300,000 jobs worldwide.

    Cuts are expected to come from layoffs, the sale of units and attrition, CNBC said. Overall capital expenses may decline as much as 20 percent, and cuts are expected to be deep in investment banking, it said.

    Citigroup did not respond to a request for comment.

    According to the Associated Press, Chairman Sir Win Bischoff said Monday at a Dubai conference, "What all of us have done, and perhaps injudiciously, we've added a lot of people over ... this very benign period."

    The cuts are Chief Executive Vikram Pandit's most dramatic move yet to restore profitability and bolster a sagging share price. Last week, Citigroup's stock fell into the single digits for the first time since Sanford "Sandy" Weill created the company in 1998 from the merger of Travelers Group Inc and Citicorp.

    Pandit became chief executive last December and has faced much criticism from investors and others for failing to implement a workable turnaround plan for Citigroup.

    The New York-based bank has lost more than $20 billion in the last year, hurt by bad bets on complex and risky debt, often tied to mortgages. Some analysts say the bank might not be profitable before 2010.

    Pandit was holding a "town hall" meeting for employees Monday morning to discuss the bank's plans.

    Shares of Citigroup have fallen 68 percent this year, leaving the bank with a market value of only $51.9 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department's bank bailout plan.

    Citigroup was built principally by Weill, who ceded control to Pandit's predecessor, Charles Prince, in 2003.

    Analysts believe Citigroup never invested enough in technology or to make the bank's parts work well together.

    Its geographic diversity, including operations in more than 100 countries, is now also working against it as customers in such countries as Brazil, India and Mexico find it harder to keep up with their bills.

    At the same time, Citigroup's ability to grow at home is relatively limited. Last month, Wells Fargo & Co derailed Citigroup's attempt to buy Wachovia Corp and its $418.8 billion of deposits.

    (Reporting by Jonathan Stempel; Editing by Steve Orlofsky and John Wallace)
  2. Amazingly they still have 300k on the payroll. 50k is a drop of water in a bucket. They should have started cutting their workforce way more aggressively months ago. What the hell is this Pandit clown doing? He didn't raise more money when C was at $20 or even in the high $10s and NOW.. way too late ... axes 50k.
  3. Mecro


    That's 17% of their workforce. Far from a drop of water in a bucket.

    Their stock price is down cause they are riddled with worthless paper. Overall, the company is crap anyway.

    If you plan on putting a positive rah rah rah spin on the matters, pick your spots better.
  4. Stock's a buy at $9.40 for a nice short term pop. Wouldn't surprise me to see C hit $10 today.
  5. Positive spin? Did you read what I posted at all?

    I said they're way overdue cutting workforce and 50k is way too little, way too late for a company losing billions a quarter with a disintegrating business model.
  6. Mecro


    50k jobs is far from a drop in the bucket, as opposed to your opinion. You're seeing serious unemployment start taking place.

    Job cutting is the standard lame maneuver to act like they are doing something. It's really all about the execs justifying squeezing out as much salary and bonuses as possible while the company goes down the drain. Companies like Citigroup do not produce anything, they essentially embezzle off the monetary system at the expense of the population.
  7. Reading comprehension:

    Now re-read what I wrote and tell me how I am giving the news a positive spin.

    Job cutting is exactly the right answer for a company that overloaded with debt, a disintegrating business model and years of fantasy earnings and revenues that won't ever come back. Pandit ought to be way more aggressive laying off staff, God knows what's holding him back. The best thing he could do is fire every 2nd little lemming and see what happens next.

    You may not agree, but cutting Pandit's bonus and firing a bunch of executive staff won't be enough to save this pig.
  8. Mecro


    Ok I misunderstood what you meant, my bad.

    On the other topic though. Job cutting of functional staff does not work, has rarely worked and will rarely work. The execs and the CEO (whom you have have critisized) are the guys who did make Citigroup into a massive subprime crap depository, so it does make sense to get rid of them. But of course, that's not how the executive system at corporates works. I would not be surprised to see "retention bonuses" going around Citigroup for the execs, including a nice payout for Pandit himself.

    In most of the world, when the decision makers at the top screw up, they get the boot and are sometimes liable.. At Citigroup and 90% of the corporations, they just fire some grunts and clear up cash to continue paying themselves. On top of it, in today's times, the taxpayers also end up bailing the company out.

    This is not to say that there is not dead weight at Citigroup on all levels. That company has been sh*t for a very long time. The word about the sh*t hitting the fan there has leaked through the grapevine quite a while ago. But, as usual, the focus of job cuts will be on the grunts, not the real perpetrators. Additionally, the real problem is not labor expenses, not even close.
  9. The industry is over bloated. More paper pushing bodies than actual producers in the Banking/Investment Industry.

    The industry as a whole is changing. There must be a "cleaning process". Get the inefficent bodies out and slim down.
    #10     Nov 17, 2008